Fluor Corporation v. Zurich American Insurance Co., No. 21-3389 (8th Cir. 2023)
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Zurich American Insurance Company (“Defendant”) insured St. Joe Minerals Corporation (“St. Joe”) and its sole shareholder Fluor Corporation (“Plaintiff”) from 1981 to 1985. St. Joe operated a lead smelting plant in Herculaneum, Missouri. Residents of the town sued Fluor and St. Joe in the early 2000s, claiming that they had been injured by the plant’s release of lead and other toxins.
Defendant agreed to defend the companies and paid out $9.87 million. Defendant also contributed more than $25 million to a settlement between St. Joe and the remaining plaintiffs. Plaintiff went to trial, lost in a jury trial, and then settled the claims for $300 million.
Defendant filed for declaratory judgment against Plaintiff, who filed a counterclaim alleging bad faith failure to settle. The district court granted summary judgment to Defendant, concluding that the policy limited Defendant’s liability on a per-occurrence basis and that the $3.5 million per-occurrence limit had been exhausted by Defendant’s initial payments. The court also concluded that Defendant did not act in bad faith when it elected not to settle the claims against Plaintiff.
The Eighth Circuit reversed the district court’s policy-limits determination and remanded for further proceedings. The court found that an endorsement modified the limits of liability for comprehensive general liability, including bodily injury liability, to be on a per-claim basis.
Court Description: [Wollman, Author, with Colloton and Stras, Circuit Judges] Civil case - Insurance. In this suit concerning coverage for judgments arising out of the Doe Run lead contamination litigation, the district court erred in determining that the policy provisions in the comprehensive general liability insurance coverage issued to Fluor limited Zurich's liability on a per-occurrence basis, as an endorsement provision modified the limits for comprehensive general liability, including bodily injury liability, to be on a per-claim basis; the judgment is reversed, and the case is remanded for further proceedings. Judge Colloton, dissenting.
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